Transformational Innovation Opportunities (TRIO)

30 July 2026, 20:58 UTC Chief Investment Office GWM Investment Research

Weekly Power Brief #74: A strong start to the 2Q earnings season Transformational Innovation Opportunities (TRIO): Power and resources Authors: Nathaniel Gabriel, CFA, CIO Equity Strategist, Materials & Industrial, UBS Financial Services Inc. (UBS FS); Carsten Schlufter, CIO Equity Sector Strategist, UBS Switzerland AG; James Dobson, CFA, CIO Equity Strategist, US Energy & Utilities, UBS Financial Services Inc. (UBS FS); Nikolaos Fostieris, Global Equity Strategist, UBS Switzerland AG; Kayden Lee, CIO Equity Strategist, UBS AG Singapore Branch; Eva Lee, CFA, Head Greater China Equities, UBS AG Hong Kong Branch

• The 2Q earnings season is underway, with nearly one- third of the S&P 500 having reported results. Early releases across Power and resources companies and their peers are reinforcing our constructive thesis and support a strong outlook for the topic into the second half of the year.

• In industrials, first results point to broad-based strength in orders, margins, and cash flow, with power equipment, electrification, grid infrastructure, and industrial end- markets benefiting from robust demand, while AI-related data center build-outs continue to support backlog visibility and pricing power into the second half. Source: Getty images, UBS

• For utilities, accelerating hyperscaler and large-load data center demand, alongside energy-security priorities, is widening the gap between installed capacity and power requirements. This expands the opportunity for long-term regulated utility capital expenditure, additional generation capacity, renewables and storage development, and behind-the-meter solutions.

Our view in summary equipment segment, followed by utilities and raw materials, In our earnings preview, we projected a positive showing while facilitators remained largely flat. From a regional for Power and resources companies in the 2Q26 reporting perspective, all regions posted positive relative performance, season. While we are still early in the schedule of results, with North America being the largest contributor. early prints have been quite encouraging and fully support our expectation for a strong second half of the year for our strategy. In this briefing, we touch on some of the key takeaways from companies on our list, as well as relevant peers.

Weekly performance update Following encouraging early results from the companies in the topic, the Power and resources strategy outperformed both in absolute terms and relative to the MSCI All Country World Index in the week ending 24 July. At the sector level, performance was primarily driven by the

This report has been prepared by UBS Financial Services Inc. (UBS FS), UBS Switzerland AG, UBS AG Singapore Branch, UBS AG Hong Kong Branch. Please see important disclaimers and disclosures at the end of the document.

Transformational Innovation Opportunities (TRIO): Power and resources

"Power and resources" selection list GE Vernova beat consensus estimates in 2Q, with EPS of USD 2.47 versus USD 1.86 expected. EBITDA margins expanded 280bps even as equipment grew faster than services, showing the strong pricing embedded as backlog converts to revenue. Free cash flow was exceptionally strong, jumping from essentially zero in the year-ago period to USD 5 billion in 2Q. Source: UBS This is a copy of the Equity Preference List (EPL) “Power and resources.” Organic orders rose 88%, with 134% growth in Power As selections may change, we recommend visiting the UBS WM CIO and a 1.7x book-to-bill in Electrification. Gas turbine orders portal (which also lists the analysts responsible for the selections and were 12 GW (a tad light compared with high expectations), the thematic benchmark), or contacting your client advisor for the latest though backlog and slot reservations rose to 116 GW from update of this EPL. 100 GW—covering 5.8 years of production at the current rate and 4.8 years at the planned rate in 2028. Pricing Note: Weights shown above are the portfolio weights based on the Power continued to accelerate strongly as well. Wind orders, and resources Equity preference list published as on 16 July 2026. however…